Singapore has always been the perfect financial hub for doing business. It was ranked second for the ease of doing business in 2019. As Singapore’s government has a pro-business policy, a lot of foreigners prefer to incorporate in Singapore over many other countries. If you are a foreigner, this is an in-depth guide that will help you navigate through the necessary steps to set up a business in Singapore.
1. Sole Proprietorship Registration
As a foreigner, you can apply for sole-proprietorships in Singapore, but there must be an authorized representative that reside in Singapore as you are not in Singapore. A resident could be a citizen, permanent resident, or Entrepass holder. If you wish to apply for an Entrepass, please refer to MOM. On top of this, there are other essential components when registering for a sole-proprietorship. You will also need to settle on the business name, location or address, and the BizFile form with a SingPass. In the case that you do not have a SingPass with you, you may also have a filing agent to complete the application.
2. Partnership Registration
Partnership registration is allowed if your business partners live in Singapore. However, if all partners are foreigners, this authorized representative will need to register the partnerships for the company.
3. Company Incorporation
There are three types of business entry for foreigners, including Singapore Branch Office, Singapore Subsidiary, and Representative Office.
Branch Office
A branch office does not mean it is a separate legal entity. It is just a part of the parent company. To elaborate, the parent company will need to take charge of the branch office. Moreover, the branch office is not really a local company. Therefore, the branch office will act based upon the parent company and will file based on their accounts and central office.
Singapore Subsidiary
Another option is the Singapore Subsidiary, which is meant to be a local private limited company. Most of the shareholders can also be a local or foreign entity or wholly owned by a foreign company. A subsidiary is different from a branch office since subsidiaries have their legal entities from the parents. The parents are not responsible for the subsidiaries. Subsidiaries will be treated the same way as a local company such as tax exemptions, and they are not obligated to implement in the same way as the parents.
If you would like to register for these two entries, you can go to BizFile online, from the country of the parent company or find a filing agent to apply. It is important to note that a branch office and a subsidiary also needs an authorized representative living in Singapore.
Representative Office
Unlike the first two entry methods, a representative office is simply an extension of the parent companies. The representative offices cannot be in any contracts, nor any activities that make a profit for them since they do not have to pay tax. They are only allowed to do market research or studies. Therefore, they do not have any filing requirements like the other two methods. However, parent companies are legally entitled to be responsible for representative offices. It is important to note that representative offices are usually for temporary use. The reason is that a representative office can exist for a maximum of three years.
The main difference between the first two entries and this entry is that a representative office needs to register on the Enterprise Singapore Website instead of BizFile. Another difference is that an authorized representative is not necessary although a representative staff from the parent company must go to Singapore. Ultimately, it is up to you to choose wisely based upon what you think will most benefit your foreign company.
For further assistance, please refer to our homepage. Comment below to let us know if this was helpful.
